MICROVISION, INC.

Previous wording

Our product suite also includes our validation software tool, the MOSAIK™ suite, which is targeted for use by OEMs and Tier 1s for validating vehicle sensors for ADAS and autonomous driving, or AD, applications. In 2024, we reduced the dedicated resources and investment into further development of MOSAIK. Specifically, in 2024, in an effort to better align our resources with our product plan, we restructured and reorganized our workforce and related expenditures to strategically focus on our perception software and MAVIN and MOVIA products. While this 41% reduction in workforce added approximately $6.0 million to our fiscal year 2024 expenses, we expect this action to extend our financial runway through reduced personnel expenses and other operational efficiencies.

Current wording

Our product suite also includes our validation software tool, the MOSAIK™ suite, which is targeted for use by OEMs and Tier 1s for validating vehicle sensors for ADAS and autonomous driving, or AD, applications. In 2024, we reduced the dedicated resources and investment into further development of MOSAIK. Specifically, in 2024, in an effort to better align our resources with our product plan, we restructured and reorganized our workforce and related expenditures to strategically focus on our perception software and MAVIN and MOVIA products. While this 41% reduction in workforce added approximately $6.0 million to our fiscal year 2024 expenses, it reduced go-forward operating expenses through reduced personnel expenses and other operational efficiencies.

Previous wording

The decrease in revenue for the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to shipments of MOVIA L sensors to Daimler Truck North America and affiliates in the first quarter of 2024 as part of their RFQ evaluation process.

Current wording

The decrease in revenue for the six months ended June 30, 2025 compared to the same period in 2024 was primarily due tohigher sales of sensors to industrial customers in the 2024 period driven by shipmentsof MOVIA L sensors to Daimler Truck North America and affiliates as part of their RFQ evaluation processes.

Previous wording

Cost of revenue can fluctuate significantly from period to period, depending on the product mix and volume, the level of overhead expense and the volume of direct material purchased. The decrease in cost of revenue for the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to decreased revenue and the revenue mix.

Current wording

Cost of revenue can fluctuate significantly from period to period, depending on the product mix and volume, the level of overhead expense and the volume of direct material purchased. The decrease in cost of revenue for the three and six months ended June 30, 2025 compared to the same periods in 2024 was primarily due to decreased revenue and the revenue mix.

Previous wording

The decrease in research and development expense during the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to lower salary and benefits expense of $5.6 million, lower restructuring charges of $2.4 million, lower purchased services of $1.2 million, and lower direct materials and equipment costs of $0.4 million.

Current wording

The decrease in research and development expense during the three months ended June 30, 2025 compared to the same period in 2024 was primarily due to lower salary and benefits expense of $2.7 million, lower restructuring charges of $2.6 million, lower purchased services of $0.5 million, lower direct materials and equipment costs of $0.3 million, and lower IT and software costs of $0.3 million.

Previous wording

The decrease in sales, marketing, general and administrative expense during the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to lower salary and benefits expense of approximately $2.2 million, lower trade show expense of $0.4 million, and lower restructuring charges of $0.1 million. These decreases were partially offset by higher building costs of $0.2 million.

Current wording

The decrease in sales, marketing, general and administrative expense during the six months ended June 30, 2025 compared to the same period in 2024 was primarily due to lower salary and benefits expense of $2.9 million, lower restructuring charges of $0.7 million, and lower trade show expense of $0.4 million.

Previous wording

The increase in interest expense during the three months ended March 31, 2025 compared to the same period in 2024 relates to $7.3 million of non-cash interest expense representing the discount on the 2025 Purchase Agreement for warrants and shares of common stock (seePart I, Item 1, Note 7. Warrant Liability), $3.5 million of non-cash interest expense related to amortization of the debt discount and issuance costs on notes payable, and $2.1 million of non-cash interest expense related to the modification of notes payable (seePart I, Item 1, Note 6. Notes Payable and Derivative Liability).

Current wording

The increase in interest expense during the six months ended June 30, 2025 compared to the same period in 2024 relates to $7.3 million of non-cash interest expense representing the discount on the 2025 Purchase Agreement for warrants and shares of common stock (seePart I, Item 1, Note 7. Warrant Liability), $5.7 million of non-cash interest expense related to amortization of the debt discount and issuance costs on notes payable, and $2.1 million of non-cash interest expense related to the modification of notes payable (seePart I, Item 1, Note 6. Notes Payable and Derivative Liability).

Previous wording

As a result of the debt modification during the three months ended March 31, 2025, we recognized a loss on extinguishment of notes payable. SeePart I, Item 1, Note 6. Notes Payable and Derivative Liabilityfor additional discussion.

Current wording

As a result of the debt modification during the six months ended June 30, 2025, we recognized a loss on extinguishment of notes payable. SeePart I, Item 1, Note 6. Notes Payable and Derivative Liabilityfor additional discussion.

Previous wording

We have incurred significant losses since inception. We have funded operations to date primarily through the sale of common stock, convertible preferred stock, warrants, the issuance of convertible debt and, to a lesser extent, from development contract revenues, product sales, and licensing activities. As of March 31, 2025, we had $51.9 million in cash and cash equivalents and $17.1 million in short-term investment securities. We also have approximately $113.4 million availability left on our existing $150.0 million ATM facility that was put in place in the first quarter of 2024, although sales under the ATM facility require sufficient authorized capital. In addition, we have a remaining commitment pursuant to the convertible note facility of $30.0 million, subject to certain limitations. Based on our current operating plan, we anticipate that we have sufficient cash and cash equivalents to fund our operations for at least the next 12 months.

Current wording

We have incurred significant losses since inception. We have funded operations to date primarily through the sale of common stock, convertible preferred stock, warrants, the issuance of convertible debt and, to a lesser extent, from development contract revenues, product sales, and licensing activities. As of June 30, 2025, we had $74.1 million in cash and cash equivalents and $17.3 million in short-term investment securities. Also on that date, we had approximately$76.5 million availability left on our existing $150.0 million ATM facility that was put in place in the first quarter of 2024. In addition, we have a remaining commitment pursuant to the convertible note facility of $30.0 million, subject to certain limitations. Based on our current operating plan, we anticipate that we have sufficient cash and cash equivalents to fund our operations for at least the next 12 months.

Previous wording

Cash used in operating activities totaled $14.1 million during the three months ended March 31, 2025 compared to cash used in operating activities of $20.8 million during the same period in 2024. Cash used in operating activities resulted primarily from cash used to fund our net loss, after adjusting for non-cash charges such as interest expense, share-based compensation, depreciation and amortization charges, unrealized gains and losses, and changes in operating assets and liabilities. The changes in cash used in operating activities were primarily attributed to decreased operating expenses related to personnel. We expect to make minimum payments to our contract manufacturing partner in connection with the production of MOVIA sensor inventory of approximately $2.6 million during the remainder of 2025 and 2026 in line with agreed-upon deliveries.

Current wording

Cash used in operating activities totaled $26.8 million during the six months ended June 30, 2025 compared to cash used in operating activities of $39.4 million during the same period in 2024. Cash used in operating activities resulted primarily from cash used to fund our net loss, after adjusting for non-cash charges such as share-based compensation, intangible impairment expense, depreciation and amortization charges and changes in operating assets and liabilities. The changes in cash used in operating activities were primarily attributed to decreased operating expenses related to personnel. We expect to make minimum payments to our contract manufacturing partner in connection with the production of MOVIA sensor inventory of approximately $2.3 million during the remainder of 2025 and 2026 in line with agreed-upon deliveries.

Previous wording

During the three months ended March 31, 2025, net cash provided by investing activities was $3.1 million compared to net cash used in investing activities of $3.3 million during the three months ended March 31, 2024. During the three months ended March 31, 2025, we purchased short-term investment securities totaling $10.3 million and sold short-term investment securities totaling $13.5 million. During the three months ended March 31, 2024, we purchased short-term investment securities totaling $7.8 million and sold short-term investment securities totaling $7.9 million. Purchases of property and equipment during the three months ended March 31, 2025 and 2024 were $0.1 million. During the three months ended March 31, 2024, we made payments totaling $3.3 million related to the acquisition of Ibeo assets.

Current wording

During the six months ended June 30, 2025, net cash provided by investing activities was $2.8 million compared to net cash used in investing activities of $7.4 million during the same period in 2024. During the six months ended June 30, 2025, we purchased short-term investment securities totaling $19.3 million and sold short-term investment securities totaling $22.4 million, compared to purchases of $23.5 million and sales of $22.7 million in the same period of 2024. During the six months ended June 30, 2024, we made payments totaling $6.3 million related to the acquisition of Ibeo assets.

Previous wording

Cash provided by financing activities totaled $8.2 million during the three months ended March 31, 2025, compared to net cash provided by financing activities of $21.0 million during the same period of 2024. Proceeds received from stock option exercises totaled $0.1 million during the three months ended March 31, 2024. Net proceeds from issuance of common stock and warrants were $8.2 million during the three months ended March 31, 2025 compared to $21.0 million during the three months ended March 31, 2024.

Current wording

Net cash provided by financing activities totaled $43.3 million during the six months ended June 30, 2025, compared to net cash provided by financing activities of $26.2 million during the same period of 2024. Net proceeds from issuance of common stock and warrants were $43.3 million during six months ended June 30, 2025 compared to $26.1 million during the same period in 2024. Proceeds received from stock option exercises totaled $0.1 million during the six months ended June 30, 2024.